Monday, April 14, 2008

Republicans and Laissez Faire Part Ways

Historically identified as pro-business champions of the free market economy, the Republican party continues its post-September-11th expansion of government intervention in the private sector, and people are starting to notice.

The process, of course, began after the terrorist bombings, when the world awakened to the very real threat posed by religious fanatics bent on destruction. Responding swiftly, both parties created the Homeland Security Administration consolidating immigration, customs, and a variety of previously independent agencies into one mighty powerhouse. The hiring of personnel represented the largest peacetime surge in the federal payroll since the beginning of the Republic.

Whether one agrees or disagrees with the what has happened since, it is clear that the Homeland Security Act created a totally new point of view in Washington, and one which Americans have to date accepted without much consideration. Only with the unprecedented Wall Street bail0ut of a private firm by the Feds, bankrolled by U.S.taxpayers, did the discussion really start.

So it continues, and as the New York Times reported today, the most recent agency to flex its regulatory muscle is the FAA. The article explores the “overreaction” of this administration to what is perceived to be lax enforcement, and argument as compelling (in light of the memory of the events of September 11th) as it is disturbing in its underlying reasoning and the implications of these actions on the private sector.

No one would argue that air safety is critical, but never have the skies been safer. In a careening economy, does it make sense to trigger massive losses to the major carriers (not to mention tremendous inconvenience to the flying public) via on demand inspections based on knee-jerk reactions? Not in my book. And as compelling as it is, the argument that the Fed needed to save Wall Street via federal funding is, well, inconsistent with a free economy. I’m no economist, but I know that this kind of intervention is like a pebble dropped in a pond, and the repercussions of such governmental intervention extend far beyond their underlying rationale and into some pretty unexpected consequences.

Remember when the President declared that the Iraq war was won?

For corporate America, this all means one thing: the notion of “I’m from the government and I’m here to help” has never sounded more disturbing. As ICE continues to create good press with middle America via random raids and a spirit of conviction (instead of employer education), the gap between those companies who do things right and those who don’t bother widens…because it compliance is less compelling when you might get sanctioned regardless of your best intentions.

The FAA should work with carriers to plan sensible safety programs that will neither disrupt the flying public nor bankrupt the industry. Similarly, ICE, SSA, DOL, and other labor enforcement efforts should do the same with U.S.employers. Until Washington understands that it’s not about villainizing employers but, rather, creating a meaningful system of compliance, the chaos will continue.